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Capita, one of the UK government’s biggest contractors, said it was investigating an IT failure that left staff unable to access systems and disrupted services provided to local authorities as well as to some businesses. The company, which provides IT services and staff to a number of UK government and public sector bodies including the Ministry of Defence and Transport for London, said on Friday that it was investigating a “technical issue” with its systems, its extent and its cause. The possibility of a cyber attack could not be ruled out, according to two people familiar with the matter. Problems appeared to be affecting internal systems at Capita rather than client systems, but this could include staff employed by Capita working on behalf of public sector departments and companies, the people said. “It may affect them operationally,” said one. London-listed Capita operates in both the public and private sectors, which gives it a key role across vital services provided by the state as well as call centre support for companies. In a statement on Friday, Capita said: “Following a technical problem which has affected access to some of our services today, we can confirm that we have identified an IT issue that is primarily impacting our internal systems. We are working to swiftly restore those services that have been affected and will issue a further update in due course.” A Capita spokesperson said: “We would like to reassure any customers whose services have been affected that we are making good progress and working closely with our technical partners to swiftly resolve the issues.” People familiar with the matter said the issues at Capita appeared to be around applications linked to Microsoft 365, including Office applications such as email and video calls. Microsoft did not immediately provide a comment, but no wider outage appears to have been reported for its 365 services. Companies that use Capita for UK call centre services including O2 were affected. O2 confirmed that there would be delays for some customer calls given the reduction in capacity caused by the loss of Capita-employed staff. Several local councils that outsource services, including South Oxfordshire, said they had been caught up in the disruption. London’s Barnet Council, which uses the group’s staff in its call centre, said that its call line was down. Barnet Council said: “Our main customer service number is currently affected by the Capita IT issue. All other phone lines into council services are still working.” Barking & Dagenham council said that as a result of “a technical fault with our out-of-hours service systems, callers may experience slight delays in us being able to respond to their calls throughout the weekend”. It added in a statement on Twitter: “You may be aware that Capita, who provide some services to organisations / councils, are potentially experiencing a cyber attack. ” Capita has digitised many critical processes including the ordering of medical supplies and the processing of payments. It also helps the BBC collect the licence fee, and delivers support services to GPs, dentists, opticians and pharmacists in England’s NHS. The company has also been contracted by the Department for Work and Pensions to deliver Personal Independence Payment assessments, which are designed to help people with a long-term condition or disability lead independent lives through financial support. A Cabinet Office spokesperson said: “We are aware of an incident affecting some systems within Capita and we are in regular contact with the company as they continue to investigate the issue.” Shares in Capita closed down 4.2 per cent on Friday.